In a fiduciary capacity, it is the duty of the real estate agent to protect a clients’ privacy and keep all information confidential. To understand the relationship between Fiduciary Duties and Realtors, let’s first break down the meaning of both terms.
What Is an Agent?
An agent is a person who acts or works on behalf of another person (the principal) under a contractual relationship. Generally, the agent takes actions on behalf of his/her client (within the scope of his agency) in transactions with third parties. At Inman Torres and Company, we will work with you from start to finish in ensuring a positive and smooth transaction.
The client, or principal, is the person who appoints the agent to act on his/her behalf. In real estate transactions, the principal has traditionally been the seller of the property, who hires a real estate agent to sell or lease his/her property. Recently, more buyers have begun to hire their own agents to represent them in the sale/purchase transaction.
Traditionally, the principal/agent relationship was one of confidence and trust. Like other agents, the real estate agent was considered to be a fiduciary. That meant that a real estate agent was required to act with care and the utmost good faith towards his/her principal. We still hold ourselves accountable to those principles to this day. You can read more about this in our Realtor Code of Ethics.
Under traditional agency law, fiduciaries have affirmative duties towards their principals, including (not limited to):
- Accounting: The agent must account for all funds entrusted to her and not commingle (combine) client/customer funds with her personal and/or business funds.
- Care: The agent must use all of her skills to the best of her ability on behalf of the client.
- Confidentiality: The agent must keep confidential any information given to her by her client, especially information that may be damaging to the client in a negotiation.
- Disclosure: The agent must disclose to the client any information she receives that may benefit the client’s position in a negotiation.
- Loyalty: The agent owes undivided loyalty to the client and puts the client’s interests above her own.
- Obedience: The agent must obey all lawful orders that the client gives her.
To learn more about Fiduciary Duties and realtors, please see below and contact us if you have any questions.
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